189
Mobile Computing and Commerce
7
Chapter
Learning Objectives
쐃Understand mobile computing technologies.
Describe the emergence of the mobile financial services industry.
Understand the growing role of mobile computing in shopping, entertainment, gaming, hospitality and travel, and advertising.
Describe the growth of location-based services and commerce.
Identify the expansion of enterprise handhelds that make use of mobile computing technology.
Chapter 7 Link Library Quick Look at Chapter 7
Using Mobile Technology to Save Lives
7.1
Mobile Computing Technology7.2
Mobile Financial Services (MFS)7.3
Mobile Shopping, Entertainment, and Advertising7.4
Location-Based Services and Commerce7.5
Mobile Enterprise ApplicationsBusiness Case:
Starbucks Coffee to Go Mobile CommerceNonprofit Case:
Mobile Charity via Cell PhonesAnalysis Using Spreadsheets:
Estimating the Financial Benefits of Increased Customer LoyaltyReferences
ACC FIN MKT OM HRM IS
Integrating IT
Ecommerce Times’ M-Commerce ecommercetimes.com/perl/section/m-commerce/
Mobile Commerce Daily mobilecommercedaily.com Storefront Backtalk storefrontbacktalk.com/
Lo-So (Location-based social networking) Foursquare.com
Augmented Reality on Smartphones youtube.com/watch?v=b64_16K2e08
Mobile payments threaten retail banks and credit cards youtube.com/watch?v=vpw9KcqgVvE Wearable Computer by Motorola youtube.com/watch?v=zNYNZ03WH1E
Innovative Mobile Payment System by Square youtube.com/watch?v=iBieYjxUj5Q Mobile Inventory Management youtube.com/watch?v=6ekR-CUDD9o
This section introduces you to the business issues, challenges, and IT solutions in Chapter 7. Topics and issues mentioned in the Quick Look are explained in the chapter.
Mobile computing has changed dramatically since 2008.
Portable devices that connect wirelessly to the Internet are lighter, smaller, thinner, and much more powerful.
Widely popular smartphones are now capable of per- forming functions like playing full-length movies that weren’t even available on desktop computers a few years ago. Web-enabled computers for navigation and entertainment are available in most luxury vehicles and are becoming an option in mid-priced ones.
New categories of handhelds have emerged and been rapidly adopted, such as e-readers—Amazon’s Kindle and Apple’s iPad. Wireless hotspots to connect to the
Internet are everywhere in urban areas and on trans- portation lines, and access to high-speed 3G and 4G net- works has made interoperability a standard, as you also read in Chapter 1. Consumer and enterprise apps for mobile computing and commerce continue to expand the capabilities of this in-demand technology.
In this chapter, we review the technological founda- tions for mobile computing and commerce and identify the factors that impact the usability of these tools. You will read how companies are gaining customer loyalty and other competitive benefits from mobile commerce and wireless networks as well as how mobile operating systems (OS) and apps are accelerating the growth of and demand for mobile computing.
QUICK LOOK at Chapter 7, Mobile Computing and Commerce
The Institute of Medicine issued a startling report in 2000 about the safety of the nation’s healthcare system. According to the report, preventable errors in the healthcare system are the leading cause of death in the United States. The report cited studies suggesting that between 44,000 and 95,000 people die each year as a result of preventable errors made by healthcare providers. Errors specifically attributable to medication occur frequently in American hospitals. In compar- ison, workplace accidents caused 6,000 deaths nationwide.
Even when a medication error doesn’t lead to death, the impact can be significant.
Human and Financial Tolls of Poor-Quality Healthcare Information
Another study estimates that medication errors cost the nation over $177 billion a year in direct costs. This doesn’t include indirect costs such as lost productivity and the lost wages experienced by the affected patients. To make matters worse, hospitals are not the only place people suffer from medica- tion errors. These problems also exist in nursing homes and long-term-care facilities with considerable frequency. Clearly, the financial cost of this problem is significant at a national
Using Mobile Technology to Save Lives
IS ETHICS190
191 level and an agonizing problem for individuals and families on
a personal level.
A Solution: Handheld Mobile Computing and Electronic Records
To address this disturbing problem, experts have recom- mended IT solutions that rely heavily on mobile computing technology (see Figure 7.1).
A number of studies have identified critical points in the medicine-dispensing process where errors are most likely to occur. These include, (1) the point of prescription, (2) dispens- ing of medication by pharmacists, and (3) administration of medication by medical personnel or by patient.
Using handheld mobile computing devices, medical per- sonnel can reduce the chance of errors when prescribing med- icines (see Figure 7.2). Handhelds can scan barcodes on hospital patient bracelets to correctly identify patients and to retrieve electronic records with information about the patient’s condition, drug allergies, and other medications they are tak- ing. The physician can also call up information about the med- icine being considered for the patient, identifying any potential dangerous interactions that might occur. Once the doctor determines the proper medication, information can be transmitted directly to the pharmacy, eliminating the chances of error due to unclear handwriting, loss, theft, or fraudulent alteration of the script (see Figure 7.3).
At the pharmacy, electronically received orders are read accurately. Pharmacists scan barcoded medicine bottles prior to dispensing the drugs to make sure they are the same ones ordered by doctors. Dosage levels ordered by the doctor can be checked by the pharmacist for accuracy and appropriate-
ness, providing another check against error. The pharmacist may also have access to patient records in order to check for potential conflicts with existing medicines. In larger pharma- cies, the pharmacist may carry a wireless handheld with a scanning tool when looking for containers of prescription drugs. Scanning a large bottle of medication will not only identify the drug but may also tell the pharmacist how many pills or units remain in the bottle to be dispensed.
When nursing staff or other medical personnel arrive at the patient’s bedside to administer the medicine, a handheld mobile device is again used to scan the patient’s barcoded bracelet to confirm identity. Barcodes on the medicine are then scanned to confirm that the drug and dose are consistent with what the physician ordered. Alert systems warn medical per- sonnel if there are any discrepancies between physician’s orders and what has been delivered. Once the medication is administered, this information is recorded to prevent addi- tional medication being delivered until the appropriate time.
Medical personnel are increasingly using a wide range of mobile devices for handhelds like the one described above.
Figure 7.1 Physicians and other medical personnel are adopting mobile technology to treat patients.
(Source: © Corbis Premium RF/Alamy)
Figure 7.2 Healthcare professionals use laptops, tablet PCs, handhelds, and other mobile computing devices to improve medical services. (Source: Cultura/Alamy)
Figure 7.3 Handwriting errors can lead to potentially dangerous medical problems. (Source: Sean Locke/iStockphoto)
computers are common in medical settings. These devices use Wi-Fi and 3G network connections to communicate over the Internet.
Faced with such a significant problem and a solution with such obvious benefits, one would think that electronic pre- scription systems would be readily embraced by the health- care industry. Unfortunately, several obstacles are slowing adoption of these mobile computing solutions, including
up financial investment, (3) lack of technology standardization, (4) provider resistance, and (5) regulatory restrictions or inde- cisiveness (Papshev and Peterson, 2002).
Sources: Compiled from Kohn, Corrigan, and Donaldson (2000), AHRQ (2000), Joia and Magalhães (2009), Papshev and Peterson (2002), Federal Register (2001), Krizner (2008).
For Class Discussion and Debate
The Healthcare Industry is one of the largest industries in most countries and can benefit significantly from on-demand, location-independent, high-quality data. However, many healthcare professionals are unfamiliar with the business, information, and IT solutions or are reluctant to apply them to their field.
1. Scenarios for Brainstorming and Discussion:
a. Cost Benefit Analysis: Papshev and Peterson (2009) iden- tified start-up costs as one reason why healthcare providers are reluctant to adopt electronic prescription systems. Using information in the case above, explain why any investment in these ISs would be a financially sound decision.
b. Resistance by healthcare providers: Some nurses and doctors have resisted the adoption of electronic prescrip- tion systems. What are some reasons these professionals might have for not wanting to utilize mobile information systems? What are some ways a hospital administrator
might make medical personnel more comfortable with the new mobile computing technology?
2. Debate:Until recently, the U.S. Drug Enforcement Agency (DEA) made it very difficult to use electronic prescription sys- tems for controlled substances, such as narcotic drugs.
Existing rules required written paper prescriptions for these kinds of drugs. Recently, the DEA changed its stance and cre- ated guidelines for using the new information technology.
However, many in the pharmaceutical industry feel that the new regulations are still too onerous.
a. One team develops an argument for continued stringent regulations related to the prescription process for these drugs. The other team develops an argument for using electronic prescription systems for these substances.
b. Each side should be prepared to demonstrate how its approach will balance the need of patients and hospitals to reduce medical errors as well as reduce the illegal use and abuse of these controlled substances.
192
7.1 Mobile Computing Technology
The mobile computing landscape has evolved rapidly over the last two decades.
Traditionally, computers were primarily used in fixed locations. They were connected via wires to peripheral devices, other computers, and networks. This lack of mobil- ity significantly constrained the performance of people whose work took place out- side of the office, such as salespeople, repair people, students, law enforcement agents, utility workers, and so on.
Wireless technology makes location irrelevant, increasing opportunities for busi- nesses through mobile computing and commerce. In this section you read about the three technological foundations of mobile computing: mobile devices, mobile oper- ating systems and software, and wireless networks.
For consumers, the most exciting part of mobile computing is the recent explosion in new computing devices. Powerful smartphones, slate computers, e-readers, and comput- ing devices that we can wear as clothing generate considerable media attention at elec- tronics shows around the world. For some consumers, mobile devices have become fashion statements. For others, the mobile device a person carries can define how sophis- ticated or cool that person is. Companies with brands likeBlackBerry,iPad,andAndroid MOBILE COMPUTING
DEVICES
have become experienced at launching sophisticated marketing campaigns designed to build consumer demand and excitement prior to the launch of new products.
Constant innovation in the mobile technology marketplace makes categoriza- tion of end-user devices difficult. As capabilities and functionality are added to devices, the differences between PC, e-reader, smartphone, and PDA get blurred. For the discussion below, we will rely on current trends in terminology and categoriza- tion but recognize that as mobile hardware evolves, new categories will emerge and traditional categories will become irrelevant.
Laptops, Notebooks, Netbooks, and Tablets. Mobility started when computers became portable. These early devices were only slightly smaller than desktop com- puters but had external cases that made it somewhat easier to transport them. They were still heavy and bulky. Portable computers evolved into laptop computers. There are currently several variations of this device:
• Standard laptopsand desktop replacements. Perform most of the basic functions of a desktop computer; weigh over 3.6 kg/8 lb.
• Notebooks. Smaller, but less powerful than the standards and weigh from 2.7 to 3.6 kg/6 to 8 lb.
• Netbooks(mini-notebook,ultra-portable). Designed for Internet access and cloud computing. Much of their functionality is based on the presumption that users will be able to connect to a network.They have limited RAM, processing power, and stor- age capabilities and weigh less than 1.8 kg/4 lb.
• Ultra-thin laptops. Serve the needs of users who need very light and thin com- puters. As with notebooks, some processing power and functionality are sacrificed to achieve the size and weight requirements, typically 1.8 to 2.7 kg/4 to 6 lb.
• Tablet PCs. Have a tough screen that might also swivel so they can be used like a notebook. When needed, the screen can be folded down flat on the keyboard and used as an electronic tablet. Other tablet PCs are called slatesbecause they lack a dedicated keyboard, relying primarily on stylus input. Tablet PCs are popular in healthcare, education, and the hospitality field and weigh 1 to 1.8 kg/2 to 4 lb.
Other variations are UMPC (ultra mobile personal computer), smartbook (com- bines features of a netbook and a smartphone), gaming laptops, and rugged comput- ers designed for industrial settings or for use in challenging climatic conditions.
Smartphones. The mobile phone market consists of people who own feature phones and smartphones (see Figure 7.4). Smartphones are mobile phones capable of Internet connectivity and a variety of mobile computing capabilities. Feature phones are more basic devices that offer little if any Internet access or computing capabil- ity. As of 2010, there were over 4.6 billion cell phone users globally, or 60.6 percent of the world’s population. Cell phone sales to end users totaled over 314 million worldwide in the first quarter of 2010. Smartphone sales totaled 54.3 million units during this same period, a 48.7 percent increase over 2009 figures (Gartner, 2010).
The Nielsen Company (nielsen.com/) estimates that smartphones now account for 23% of the U.S. cell phone market, up from 16% almost a year earlier (Kellogg, 2010).
While the market trend is definitely toward increased use of smartphones, it should be noted that even feature phones can be used in limited ways for m-commerce.
Other Handheld Devices—PDAs, iPad, E-readers. A number of other hand- held devices have emerged recently that make use of mobile networks, LCD screens, and compact processing and data storage technology. Many of these devices have received significant publicity and interest by consumers. Personal data assistants (PDAs)have been around for a number of years and have proven popular with the business community. These handheld devices initially focused on organization appli- cations such as calendars, address books, to-do lists, and memo pads. Users frequently
7.1
Mobile Computing Technology 193Figure 7.4 Google’s Android phone (shown here) along with Apple’s iPhone represent popular innovations in the smartphone market. (Source:
©Hugh Threlfall/Alamy)
synchronize these applications with applications on their personal computers. While PDAs have proven extremely popular, it is likely that this device category will dis- appear because many PDA manufacturers are integrating cell phone technology in the devices. Likewise, most smartphones contain applications that effectively turn them into PDAs. The difference between a smartphone with PDA apps and a PDA with cell phone capability is practically zero.
E-readersare devices that look similar to slate tablet computers but are positioned primarily as a way for users to read electronic books. Some of the leading devices have been promoted by book sellers like Amazon (the Kindle) and Barnes and Noble (the Nook).The Apple iPad is expected to present both of these devices with significant com- petition.The iPad is similar in size and appearance to other e-readers but offers greater functionality.The iPad is yet another illustration of a device that blurs the lines between mobile device categories. It shares similarities with slate tablet PCs, e-readers, and PDAs.
All three of the devices discussed above are capable of connecting to online stores through Wi-Fi technology or 3G connections (see below) so that users can purchase books, music, and software applications that will run on the machines.
Wearable Devices. People who work on buildings, electrical poles, or other difficult- to-climb places may be equipped with a special form of mobile wireless computing device called a wearable device. These devices come in a variety of forms, including wrist devices, small screens worn close to the eyes, voice-activated equipment, and keyboards built into gloves or clothing. For an expanded description of these devices and a history of their development, see en.wikipedia.org/wiki/wearable_computing.
Glaciercomputer.com,kopin.com, and Lxe.commanufacture a variety of wearable computers. Examples can be viewed on their Web sites.
There are three dominant PC operating systems (OSs): Microsoft Windows, Apple, and Linux. Most laptops and related devices are powered by these OSs. Programmers who write software apps target one or more of these platforms for their programs.
Writing apps for handhelds is more difficult because there are more than twice as many systems to write for. Here is a brief summary of the most popular mobile OSs:
• BlackBerry OS (RIM). Made by Research in Motion, this is currently the dom- inant smartphone OS in the United States and number two globally. It powers a vari- ety of BlackBerry-style smartphones manufactured by RIM.
• iOS (Apple, Inc.). Formerly called the iPhone OS, this innovative platform is often credited, in part, with spurring growth in the smartphone segment. The iOS is used in Apple’s iPhone, iPod Touch, and iPad products. A distinctive feature of these devices is the touch screen. Apple has encouraged third-party development of apps for the iOS, generating further functionality and excitement about these devices.
• Windows Mobile OS(Microsoft). This OS by software giant Microsoft was preceded by an earlier version called Pocket PC, which pioneered the use of multiple computing apps in a small handheld. While the Windows Mobile OS holds a respectable market share in the United States, it continues to lose ground globally to other, newer platforms.
• Android OS(Google/Open Handset Alliance). This OS is receiving very favor- able reaction in the marketplace and is predicted by some to compete fiercely against Apple’s popular iOS. Like the Apple product, its use is not limited to smartphones and it can be found in smaller tablet computers, notebooks, and e-readers.
• Palm OS (Palm, Inc.). Originally designed to power Palm’s PDA devices, this mobile OS has been enhanced for use in smartphones as well as PDAs.
• Linux OS(Linux). The iOS, Android, and Palm operating systems described above are all based on modifications of the Linux Kernel (see wikipedia.org/wiki/
Linux_kernel). Other manufacturers like Motorola and Samsung have used Linux to power their mobile phone devices.
• Symbian OS (Symbian Foundation). While this open-source software platform enjoys only a fractional market share in the United States, globally it is the MOBILE COMPUTING
SOFTWARE
dominant smartphone OS and runs mainly on phones manufactured by Nokia. The fourth generation of this OS became available in 2011.
Consumers expect to access Web sites from their smartphones and other devices and are frustrated by companies that do not have Web sites developed for this OS and purpose.This presents special challenges for business and Web site programmers because now they must design Web sites for access from the various mobile browsers.
If a company is unable to develop mobile sites for all available devices, then know- ing the relative market share of mobile OSs will help target the most dominant plat- forms. Figures 7.5 and 7.6 illustrate the relative share of these platforms in the United States and worldwide.
7.1
Mobile Computing Technology 19535%
BlackBerry
28%
Apple iOS 9%
Android OS 4%
Palm OS 3%
Linux 2%
Symbian
19%
MS Windows Mobile
Smartphone Marketshare—Qtr 1, 2010
Figure 7.5 Smartphone operat- ing system market share in the United States. (Source: Adapted from The Nielsen Company)
Global Mobile Operating System Marketshare—2009
20%
Research in Motion
14%
Apple iOS
4%
Android OS 5%
Linux 47%
Symbian
1%
Other OS
9%
MS Windows Mobile
Figure 7.6 Global smartphone OS market shares. (Source:
Adapted from Gartner, 2010.)
As you read in Chapter 4, mobile devices must be able to connect with high-speed wireless networks. The mobile computing and commerce environment relies on two basic approaches to Internet connectivity: short-range wireless technologies such as Wi-Fi and longer-range telecommunications technologies such as 3G and 4G net- works such as WiMAX. Most laptops today rely on Wi-Fi technology that requires being in range of a network access point. Cell phones communicate over a 3G net- work. However, it is possible for laptops and other mobile devices to connect with 3G networks using peripheral devices.
WIRELESS NETWORK GROWTH
Wireless Local Area Networks and Wi-Fi. Wireless local area networks have been making their way to the wireless forefront (see Table 7.1). A wireless LAN (WLAN) is like a wired LAN without cables. WLANs transmit and receive data over the air- waves from a short distance in what is known as Wi-Fi, which is short for Wireless Fidelity. Wi-Fi technology is described in Chapter 4.
The growth of Wi-Fi networks globally is one of the factors fueling the growth of mobile computing. As the number of access points or hotspotsgrows, use of mobile devices becomes easier, more convenient, and more reliable, increasing the attractive- ness of the technology to end users. Across the world, businesses—especially restau- rants and hotels—and municipalities are increasingly offering access to Wi-Fi as a free benefit. Business and residential users are rapidly expanding their Wi-Fi networks.
Manufacturers of Wi-Fi equipment reported double-digit growth in 2010 from the pre- vious year, a further indication that Wi-Fi network coverage will continue to expand.
Wi-Fi is used to support business and compliance requirements. By now we’re aware of the terrible mining accidents that occur from time to time in various parts of the world. After the Sago mine disaster in West Virginia in January 2006, the U.S.
Congress passed the Mine Improvement and New Emergency Response (MINER) Act, which requires underground coal mining firms to upgrade procedures, equip- ment, and technology. These companies must provide two-way communications between underground and surface personnel and an electronic tracking system that allows surface personnel to determine the location of any persons trapped under- ground. The solution is to use Wi-Fi to monitor underground conditions.
3G and 4G Networks. 3G and 4G networks have evolved from telecommunications technology. Earlier forms of these networks were used primarily for voice communica- tions, but now data transmission constitutes a major portion of the information flowing over these networks. These technologies allow greater ubiquity than Wi-Fi, and cover- age is widespread, access is very good throughout most metropolitan areas and, depend- ing on the carrier, may be strong across the country. The historical trade-off between the telecommunications networks and Wi-Fi has been coverage versus speed.Wi-Fi was faster but required users to be near an open network access point. With 3G networks, a user could be traveling down the road in an automobile and reasonably expect to access the network, but at speeds slower than Wi-Fi.With 4G technologies, the telecom- munications networks are becoming faster, approaching speeds offered by Wi-Fi.
The Future of Wireless Networking. It remains to be seen how the global wire- less network system will evolve. For the foreseeable future, telecommunications and
TABLE 7.1 Wi-Fi Locations and Applications
• iWire has a searchable registry of 317,585 free and for-purchase Wi-Fi locations in 144 countries at v4.jiwire.com/search-hotspot-locations.htm
• Most major airports today offer complimentary or fee-based wireless access to the Internet. Lufthansa offers in-flight Wi-Fi service on its long-haul fleet. The hotspots on the planes are connected to the Internet via satellites. American Airlines, Alaska Airlines, JetBlue, and Virgin America offer connection to the Web to fliers as of 2008.
• McDonald’s offers free Wi-Fi hotspots in more than 11,500 restaurants, and the number is increasing daily. Local service providers provide high-quality wireless service.
• Using a wireless ticketing system, Universal Studios in Hollywood is shortening the waiting lines for tickets at its front gate. The ticket sellers, armed with Wi-Fi–enabled devices and belt mounted printers sell tickets and provide information to guests.
• Several mining companies in Europe installed hundreds of Wi-Fi hotspots in their coal mines. Information from drills and trucks, such as their positions and the weight of their loads, is transmitted wirelessly to the control center. It increases both productivity and safety.
Wi-Fi technologies will coexist. With the growth of free or public Wi-Fi access points, many users are likely to view this technology as an adequate, low-cost approach to certain types of mobile computing. While access to a telecommunications network is only available through a paid subscription, other users may see the cost as well worth the benefit of constant connectivity. It is simply too early to tell whether one or the other of these technologies will eventually become dominant or whether mar- ket forces and user behavior will continue to support a dual approach. One thing is certain—because both technologies are expanding geographically, along with increases in speed and functionality, overall mobile computing is projected to grow dramatically in the near future.
7.2
Mobile Financial Services (MFS) 197Review Questions
1. What are the three technological foundations of mobile computing?
2. List some of the reasons why it can be difficult to categorize mobile computing devices.
3. What factors have led to the recent growth of the smartphone market?
4. From an end-user perspective, what are the basic trade-offs between Wi-Fi and telecommunications technology (e.g., 3G and 4G)?
7.2 Mobile Financial Services (MFS)
Mobile bankingis generally defined as carrying out banking transactions and other related activities via mobile devices. The services offered include bill payments and money transfers, account administration and checkbook requests, balance inquiries and statements of account, interest and exchange rates, and so on.
Banks and other financial institutions let customers use mobile devices for a wide range of services. The most common of these mobile banking services are the fol- lowing (Mobile Marketing Association, 2009):
• Account alerts, security alerts, and reminders
• Account balances, updates, and history
• Customer service via mobile
• Branch or ATM location information
• Bill paying (e.g., utility bills), delivery of online payments by secure agents and mobile phone client apps
• Funds transfers
• Transaction verification
• Mortgage alerts
People access these financial services using a combination of mobile media chan- nels including Short Message Service (SMS), mobile Web browsers, and customized smartphone apps. Mobile banking is a natural extension of online banking services, which have been growing in popularity over the last decade.
Short Codes. Many m-commerce transactions utilize SMS texts in conjunction with short codes.This is true of financial services as well. A short code works like a tele- phone number, except that it is only five or six characters long and easier to remem- ber. For example, mobile banking customers of PNC Bank can send an SMS text message to short code 762265 to retrieve account information. In the body of the text, they might include messages such as BAL for account balance or LAST CHK1 to retrieve information about recent transactions.
Businesses lease short codes from the Common Short Code Association (CSCA) for $500 to $1,000 a month.The lower price is for randomly assigned codes, companies that want a specific short code pay a higher monthly rate. Once a company has leased its short code, it can begin using it in promotions and interactivity with customers.
One example of nonbanking short-code use is voting on the popular television show American Idol. Each contestant is assigned a specific short code, and viewers are encouraged to send text messages indicating which performer they like the best.
The annual MTV Movie Awardsalso uses short-code voting, which allows viewers to pick the winning entry in certain prize categories. For a related example, see the Starbucks business case at the end of this chapter. On some telecommunications net- works, ringtones are sold using short codes and SMS texts.
Throughout Europe, the United States, and Asia, an increasing percentage of banks offer mobile access to financial and account information. In 2009,ABI Research eval- uated 29 U.S. banks on accessibility of their mobile banking services. Six of the banks received top marks: BB&T, Eastern Bank, Fifth Third Bank, Northeast Bank, USAA, and Wells Fargo. Bank of America and Chase also received positive evaluations (ABI Research, 2009).
In Sweden, Merita Bank has pioneered many services, and The Royal Bank of Scotland offers mobile payment services. Banamex, one of Mexico’s largest banks, is a strong provider of wireless services to customers. Many banks in Japan allow for all banking transactions to be done via cell phone. Experts predict that growth in the mobile banking services sector could reach between 894 million and 1.5 billion cus- tomers globally by 2015. The Asia-Pacific region is expected to emerge as the pre- dominant market for mobile banking services. (Berg Insight, 2010; Global Industry Analysts, 2010).
As the wireless transmission speeds improve, the rate of mobile banking serv- ices is increasing. The same holds true for other mobile insurance and stock market trades (see Figure 7.7).
Security Issues. At present, the benefits associated with mobile banking seem to out- weigh potential security threats. However, as the number of people who engage in mobile banking increases, the likelihood that criminals will target mobile financial activ- ity is sure to grow as well. What kinds of threats exist to mobile banking? Table 7.2 lists several mobile banking risks.
MOBILE BANKING AND STOCK TRADING
Figure 7.7 Mobile banking, stock trading, and payment services have increased in recent years. (Source: Daniel Heighton/Alamy)
According to the Mobile Marketing Association (2010), about one in five U.S. adults is now using mobile commerce.As interest in mobile commerce grows, there is a greater demand for innovative payment systems that make transactions from smart- phones and other mobile devices convenient, safe, and secure. A number of busi- nesses have attempted to meet this demand with a variety of approaches. There are two basic types of transactions of interest: the online purchase of goods and services MOBILE ELECTRONIC
PAYMENT SYSTEMS
using a mobile device (e.g., ordering a book from Amazon.com) and using a hand- held to pay for goods and services in a traditional brick-and-mortar retail store. Here are examples of recent innovations approaches:
Charge to phone bills with SMS confirmation(see Boku.com). Using this approach, mobile users text a message to a short-code number specified by the payee. The amount of the charge is then added to the payer’s phone bill, and the telecom carrier remits this amount to the payee. Telecom companies may deduct a service charge from the amount paid.
Near- field communications(see Blingnation.com). Another approach to mobile payment uses a small microchip containing account information that users attach to their mobile device. The mobile user simply passes or taps the phone on a merchant terminal and payment is transferred. Users receive an SMS text message confirmation. A variation on this approach involves the use of a smart card in the user’s mobile phone.
Payment by credit card via phone number and SMS(see Zong.comand Paypal.com).
Mobile buyers create an account at a company like zong.com. This account links a mobile phone number with a credit card. When shopping online, the buyer clicks a payment button and enters his or her telephone number, which is easier to remem- ber than a credit card number. An SMS text is sent to the buyer asking for pay- ment confirmation. When confirmed, a charge is made to the buyer’s credit card.
Credit card + Web form. Using a mobile Web browser, buyers make online purchases by entering their credit card number and other identifying information just as they would if they were using a personal computer. This process can be cumbersome, given the smaller screen and keyboards on mobile devices, but it is an option.
Transfer funds from payment account using SMS(see obopay.comand paypal.com).
Using this approach, the user creates an account at a company like obopay.com and transfers money into it from a bank or credit card account. Using a mobile phone and SMS, the user can then transfer money to anyone else with a mobile phone number. The receiver must create an account at the payment company in order to retrieve the funds.
Mobile phone card reader(see square.com). This novel approach requires mobile phone users to use a small card reader that plugs into the audio input jack of most mobile devices.The card reader, which resembles a small cube, allows those with accounts at square.comto make or receive credit card payments without a merchant account.
2D tags(see Cimbal.com). This payment system uses QR or 2D tags to identify the merchant or payee. The buyer scans the merchant’s tag using a special smart- phone app and then approves the fund transfer when it shows up on the device.
7.2
Mobile Financial Services (MFS) 199TABLE 7.2 Mobile Banking Security Risks
Cloning.Duplicating the electronic serial number (ESM) of one phone and using it in a second phone—the clone. This allows the perpetrator to have calls and other transac- tions billed to the original phone.
Phishing.Using a fraudulent communication, such as an e-mail, to trick the receiver into divulging critical information such as account numbers, passwords, or other identifying information.
Smishing.Similar to phishing, but the fraudulent communication comes in the form of an SMS message.
Vishing.Again, similar to phishing, but the fraudulent communication comes in the form of a voice or voice-mail message encouraging the victim to divulge secure information.
Lost or stolen phone.Lost or stolen cell phones can be used to conduct financial trans- actions without the owner’s permission.
Sources:Compiled from Howard (2009), Mobile Marketing Association (2009), and McGee (2008).
Person-to-person transfers are also possible, since the app can generate custom QR tags that individuals can scan from one another’s mobile devices.
“Bumping” iPhones with payment applications(see bumptechnologies.com). Using an iPhone app called bump, two individuals can transfer money to each other simply by tapping their phones together.
Phone displays barcode that retailers scan(see Facecash.com). When it comes time for buyers to pay for goods and services, they present their mobile device, which displays their photograph for identification purposes and a barcode linked to a payment account that they’ve established with facecash.com.The merchant scans the barcode with a reader and completes the transaction.
Almost all of the payment systems described above are illustrated by videos on YouTube.com. Interested readers are encouraged to view these video resources for a more complete explanation of how they work.
Wireless payment systems transform mobile phones into secure, self-contained purchasing tools capable of instantly authorizing payments over the cellular network.
Many of the above systems bypass traditional credit card companies or banks, decreasing transaction costs for merchants. In addition, the payment of small sums, called micropayments,is less problematic since many of the systems are specifically designed to accommodate smaller transactions. The ability to make micropayments allows individuals to use their mobile devices to do things like purchase a beverage from a vending machine or make a payment to a municipal parking meter. Many cities in Europe, and a growing number in the United States that have adopted mobile phone payment systems for parking, have reported dramatic increases in revenue because of the reduction in loss due to theft, broken meters, and the reduced expense associated with collecting cash from traditional meters.
Mobile (wireless) wallets are yet another payment system.An e-walletis a piece of software that stores an online shopper’s credit card numbers and other personal information so that the shopper does not have to reenter that information for every online purchase. While mobile e-wallets, called m-wallets,have been around for a few years, adoption of these apps has been limited because users perceive them to be of limited value. Companies that promote m-wallets are attempting to make them more attractive by expanding their functionality beyond simple payment systems.
Their goal is to make the m-wallet an attractive replacement for a person’s physical wallet. New m-wallets will be capable of storing not only credit card information but also driver’s license, passport, and healthcare information (Swartz, 2010).
Furthermore, many of the new m-wallet products are server-side apps. This means that crucial information in a user’s wallet is not stored on the mobile device. Instead, the information is stored on secure servers and accessed, when needed, by mobile phones or other devices. This increases the safety and security of critical information by minimizing the risk associated with lost or stolen mobile devices. Makers of m-wallet apps hope that these changes will spur wide-scale adoption of m-wallets.
Review Questions
1. What are the two kinds of basic transactions requiring mobile payment systems?
2. What are short codes and how are they used to conduct transactions?
3. Why have e-wallets not been widely adopted and what are makers of m-wallets doing to make their apps more attractive?
4. What are the most common security risks associated with mobile banking?
5. Describe some of the mobile payment systems.
7.3 Mobile Shopping, Entertainment, and Advertising
Mobile commerce B2C apps are expanding in several areas—retail shopping for products and services, mobile entertainment, mobile gaming, travel and hospitality services, and sales of digitized content (e.g., music, news, videos, movies, or games).
7.3
Mobile Shopping, Entertainment, and Advertising 201 An increasing number of online vendors allow customers to shop from handheld devices. For example, customers use smartphones to shop at sites like target.com, amazon.com, and buy.com. Customers use handhelds to perform quick searches, compare prices, use a shopping cart, order, pay, and view the status of their order.Specialized devices like Amazon’s e-reader Kindle allow users to purchase and down- load books from the store. Using Apple’s iPod touch, users can purchase and down- load music from iTunes. Many national restaurant chains offer consumers the ability to search menus, order, and pay for food via their mobile devices.
Handheld users can also participate in online auctions. For example, eBay offers mobile apps for a variety of smartphones. They also use a voice-based service called Unwired Buyer that can contact bidders minutes before their auction is going to close to let them know the status of their bid. eBay subsidiary PayPal allows users to pay for their merchandise by phone. Consumers are increasingly using their phones to get product and price information while shopping in traditional stores.
Pricegrabber.com,slifter.com, and froogle.comare just some of the price-comparison sites that allow people to search for product information from their mobile phones.
Experts are now advising retailers to take these savvy shoppers into consideration when developing their mobile strategy. The ability to identify in-store mobile shop- pers and to deliver meaningful information and value through price-matching offers or other incentives is vitally important.
Mobile commerce in Japan is growing exponentially and now represents the largest volume of m-commerce sales in the world. Over 60 million Japanese are mak- ing purchases with cell phones, for example, buying their train tickets while riding the train. Mobile shopping is popular with busy single parents, executives, and teenagers, who are doing over 80 percent of their EC shopping from cell phones.
In Japan, most food products are tagged with QR codes, allowing consumers to quickly find information about the goods they are shopping for (see Figure 7.8).
According to the Daiwa Institute of Research, impulse shopping accounts for most of the purchases that are done on mobile phones, but only if the users are on flat- fee-based service.
SHOPPING FROM WIRELESS DEVICES
Figure 7.8 QR codes linked to specific goods and services are used by mobile phone users to retrieve product information.
(Source: © jeremy suttonhibbert/
Alamy)
Mobile entertainment is expanding on wireless devices. Most notable are music, movies, videos, games, adult entertainment, sports, and gambling apps.
Sports enthusiasts enjoy a large number of apps and services on their mobile devices. Apps exist to check game scores; track news updates about specific athletes, teams, or sports; participate in fantasy team contests like fantasy football; and par- ticipate in sports-oriented social networking services. Numerous sports-related games like mobile golf and sports trivia apps are widely available.There are even handhelds designed to provide tips and information for improving your own athletic perform- ance. An app that analyzes a person’s golf swing and provides advice for improving performance is available for the iPhone.
ESPN’s Sport Center, in partnership with Sanyo, offers a cell phone that comes preloaded with several sports-related apps. You can get quick access to news of your favorite teams. Video clips of up to 30 seconds are available, and so is a built-in cam- era. To occupy the owner during waiting time, sports-trivia questions are installed on the phone. Sports-related alerts are sent to the phone via text message.
Industry analysts are predicting that recent improvements in mobile computing device hardware will lead to an even bigger increase in the number of people who watch video clips, movies, and television programs on their mobile devices.The screen size of devices like Apple’s iPad makes watching videos more appealing than on a smartphone. However, the number of people viewing videos on smartphones seems to be increasing as well. Companies like theChanner.comand FLO TV, among oth- ers, offer television programs to mobile device users. Fox Mobile recently introduced a mobile app that will allow smartphone users to view television content from its Web site Hulu.com.
MOBILE ENTERTAINMENT
The iTunes Store continues to be a leader in making digital music, movies, and podcasts available to consumers for a fee. Mobile users can also access music from digital streaming sites like Pandora.comand Grooveshark.com. Both of these serv- ices offer free streaming music. Users can upgrade their accounts by paying a sub- scription fee, which then limits the amount of advertising that occurs during their listening.
While still relatively small, the mobile gambling industry is expected to grow sub- stantially in the next few years. Some predict this type of mobile commerce could generate as much as $20 billion in the near future. Primary growth of this market is expected to take place in Japan and other Asian countries.
Many handhelds exist to enhance home-based entertainment activities.The Food Network has an app with tips and recipes for fine dining and entertaining.
Mobilewinelist.comoffers a way to inventory your wine collection, rate wines, and share information about wine with other enthusiasts through your mobile device.
Mobatech is the maker of a mobile bartending app with numerous recipes for cock- tails and party drinks. Mobile Godiva is discussed in IT at Work 7.1
IT at Work 7.1 w
Belgian Godiva Chocolatier is recognized worldwide as the leader in fine chocolates. From its famous truffles and shell-molded chocolate pieces to its European-style biscuits, gourmet coffees, and hot cocoa, Godiva Chocolatier has been dedicated to excel- lence and innovation in the tradition for 80 years.
When it came time to continuing the tradition of innovation and excellence in the mobile channel, Godiva launched the Godiva Mobile initiative. Godiva Mobile was designed as a way to purchase goods and build intimate customer relationships. A device-resident app, Godiva Mobile includes Godiva’s best-selling products and can integrate with other applications on a BlackBerry smartphone, including the address book and mapping applications. Consumers purchase products by simply scrolling and clicking.
Godiva Mobile includes:
• Quick access to Godiva Chocolatier’s most popular products
• The ability to complete a shopping transaction in less than 30 seconds
• Rich product descriptions and full-color images
• Address book integration, allowing users to ship with just a few clicks
• A “One-Touch Store-Locator” that uses GPS or cell towers to automatically identify stores close to the user’s location
• Secure transactions and password-protected buying
Discussion Questions: Why is Mobile Godiva a good application for Godiva? In your answer, consider the fact that Godiva choco- lates and other products are usually bought as a gift rather than for oneself.
Mobile Godiva
With smartphones, the potential audience for mobile games is substantially larger than the market for other platforms, PlayStation and X-box included. Nearly half (45 percent) of smartphone users play games and spend an average of $41 on gam- ing handhelds. Experts expect that this market will continue to grow as network speeds increase and mobile devices become more powerful, adding increased rich- ness to the gaming experience. In Japan, where millions of commuters “kill time” dur- ing long train rides, cell phone games have become a cultural phenomenon. Now mobile games are very popular in many countries.
In July 2001, Ericsson, Motorola, Nokia, and Siemens established the Mobile Games Interoperability Forum (MGIF) (openmobilealliance.org) to define a range of technical standards that will make it possible to deploy mobile games across multigame servers and wireless networks, as well as across different mobile devices.
MOBILE GAMES
7.3
Mobile Shopping, Entertainment, and Advertising 203 A number of hotels now offer their guests in-room wireless or wireline (wired) high- speed Internet connections. Some of these same hotels offer Wi-Fi Internet access in public areas like the lobby and in meeting rooms. One of these is Marriott, which manages about 3,000 hotels worldwide. Most other large hotel chains (e.g., Best Western), as well as small hotels, offer Internet connections.Airports and other transit centers are increasingly offering Wi-Fi access to the Internet to accommodate travelers. Major airlines are exploring the ability to offer broadband Internet access during flights to users of laptops and other computing devices. Some rail services also provide in-transit Internet access to travelers.
In addition to providing guests with Internet access via Wi-Fi access points, a small number of hotels are exploring use of mobile Web sites for guests to check in, book spa or restaurant reservations, and order room service. Other technologies are being developed that would allow guests to open their hotel room door using SMS text messages or by passing their NFC (near field communications) enabled phone next to the door lock.
HOTEL SERVICES AND TRAVEL GO WIRELESS
Mobile social networkingis social networking in which two or more individuals con- verse and connect with one another using smartphones or other mobile devices. Much like Web-based social networking, mobile social networking occurs in virtual com- munities. All of the most popular social networking sites now offer apps that allow users to access their social network accounts from a smartphone or other mobile device. Some experts predict that mobile social media will be one of the most pop- ular consumer applications and, along with gaming apps, will be a driving force in the growth of the mobile market.
MOBILE SOCIAL NETWORKING
Many other mobile computing services exist for consumers in a variety of categories.
Examples include information services for news, city events, weather, and sports reports; online language translations; information about tourist attractions (e.g., hours, prices); and emergency services. Many other services are available to cell phones with Internet access. For example, Skype offers its voice, text, and video serv- ice for free.
OTHER MOBILE
COMPUTING SERVICES FOR CONSUMERS
A mobile portal is a customer channel, optimized for mobility, that aggregates and provides content and services for mobile users. These portals offer services similar to those of desktop portals such as AOL, Yahoo!, and MSN. Many companies host mobile portals today, as shown in Table 7.3.
MOBILE PORTAL
The growth of mobile computing and m-commerce is attractive to advertisers.
Smartphones enabled with GPS capabilities can convey information about a user’s location to advertisers. This information can be used, along with user preferences or surfing habits, to send user-specific advertising messages to mobile devices.
Advertising can also be location-sensitive, providing information about stores, malls, and restaurants close to a potential buyer. SMS messages and short paging messages can be used to deliver this type of advertising to cell phones and pagers, respectively.
Many companies are capitalizing on targeted advertising. See IT at Work 7.2for an illustration.
As more wireless bandwidth becomes available, content-rich advertising involv- ing audio, pictures, and video clips will be generated for individual users with spe- cific needs. The obvious challenge for advertisers will be to use this information to communicate with users in ways they find helpful and not annoying.
TARGETED ADVERTISING
The services provided by mobile portals include news, sports, e-mail, entertain- ment, and travel information; restaurants and event information; leisure-related serv- ices (e.g., games, TV and movie listings); community services; and stock trading. A sizable percentage of the portals also provide downloads and messaging; music- related services; and health, dating, and job information. Mobile portals frequently charge for their services. For example, you may be asked to pay 50 cents to get a weather report over your mobile phone. Alternatively, you may pay a monthly fee for the portal service and get the report free anytime you want it. In Japan, for exam- ple, i-mode generates revenue mainly from subscription fees.
IT at Work 7.2 w
Industry analysts expect advertising in the mobile channel to heat up. Increasing numbers of smartphones, better browsers, enhanced GPS capabilities, and better ways of measuring adver- tising effectiveness are all factors powering this growth. The fol- lowing are a few examples of wireless advertising in action.
Foursquare.com is one of the latest entries in the growing field of mobile advertising. Structured as a kind of mobile social media game, users “check in” from their phones when they visit retail stores and restaurants. They can provide information and rat- ings based on their reaction to these outlets. This information is shared with advertisers and their friends who are also part of the Foursquare network. Over time, Foursquare develops a profile of users based on the kinds of businesses they frequent and can use this information to better target consumers with advertising mes- sages. Foursquare reinforces member use of the service by award- ing badges to members for various types and levels of usage.
Members who are the most frequent shopper at a particular loca- tion are awarded the title of Mayor and may receive special atten- tion and discounts from the retailer. Foursquare provides advertisers with information about target customers that they usu- ally don’t have: location. This helps advertisers deliver timely mes- sages that can be more relevant and meaningful to consumers, increasing the chances that the ads will be acted on.
Augmented reality(AR) apps are a special technology that will become more commonplace in the future. Augmented real- ity involves computer-generated graphic images being super- imposed on pictures of real things (e.g., people, rooms, buildings, roads, etc.). This technology is used by advertisers in several ways.
For instance, a mobile phone user might point his or her phone camera at an office building and activate an AR app that generates
the logos of all food service outlets (e.g. Starbucks, Subway, McDonald’s) inside the building. Furniture retailer IKEA offers shoppers an AR app that allows them to project images of its products onto pictures of the rooms in their homes so they can
“visualize” how the products will look there. Industry experts expect that AR advertising will grow as smartphone users become more familiar with the concept. You can watch a fascinating video of an iPhone handheld developed by Yellow Pages at youtube.com/
watch?v=tOw8X78VTwg/.
Hoping to become the king of location-based Web domains, Go2Online (go2.com) helps mobile travelers find everything from lodging to Jiffy Lube stations. Partnering with Sprint, Nextel, Verizon, and Boost, Go2 makes its services available on every Web-enabled phone, Palm i705, and BlackBerry RIM pager in America. Entering “JiffyLube” or any of hundreds of other brand names into the Go2 system will bring up the nearest location where one can find that product or service.
Sources: Compiled from Moore (2010) and Whitfield (2010).
Discussion Questions:
1. What benefit do advertisers derive from knowing a customer’s location?
2. What are some similarities between Foursquare.com and other social networking services?
3. What privacy concerns do you think are important for users of location-based services like Foursquare.com to consider?
4. How might augmented reality apps be more effective than tra- ditional directory services?
Wireless Marketing and Advertising in Action
TABLE 7.3 Mobile Portals
Name Address
iGoogle google.com/m/ig
Yahoo Mobile m.yahoo.com
MSN mobile.msn.com
Windows Live mobile.live.com
AOL wap.aol.com/portal/
Redcliff (India) mobile.rediff.com Nokia Here and Now nokia.mobi/hereandnow/
MKT
7.4
Location-Based Services and Commerce 205 A voice portalis a Web site that can be accessed by voice. Voice portals are not really Web sites in the normal sense because they are not accessed through a browser.In addition to providing information, some sites provide true interaction.
iPing.comis a reminder and notification service that allows users to enter informa- tion via the Web and receive reminder calls. In addition,iPing.comcan call a group of people to notify them of a meeting or conference call.Tellme.comand quack.com also offer voice-based services.
Voice portals are used extensively by airlines, for example, enabling customers to make reservations, find flight status, and more. Many other organizations use voice portals to replace or supplement help desks. The advantage to the company is cost reduction. Users can save time, since they do not have to wait for help.
A benefit for Internet marketers is that voice portals can help businesses find new customers. Several of these sites are supported by ads; thus, the customer- profile data they have available helps them deliver targeted advertising. For instance, a department-store chain with an existing brand image can use short audio commer- cials on these sites to deliver a message related to the topic of the call.
VOICE PORTALS
Providing location-based services requires the following location-based and network technologies, shown in Figure 7.10:
• Position-determining equipment (PDE).This equipment identifies the location of the mobile device either through GPS or by locating the nearest base station. The position information is sent to the mobile positioning center.
• Mobile positioning center (MPC).The MPC is a server that manages the location information sent from the PDE.
L-COMMERCE TECHNOLOGIES
Review Questions
1. Describe how shoppers use mobile devices to enhance their shopping experience.
2. How is targeted advertising done wirelessly?
3. Describe a mobile portal.
4. What is a voice portal?
5. List types of mobile entertainment available to consumers.
6. How are hotels using mobile computing technology to increase guest satisfaction?
7.4 Location-Based Services and Commerce
Location-based commerce (l-commerce)refers to the delivery of advertisements, prod- ucts, or services to customers whose locations are known at a given time [also known as location-based services (LBSs)]. Location-based services are beneficial to consumers and businesses alike. From a consumer’s viewpoint, l-commerce offers safety. For instance, you can connect to an emergency service with a mobile device and have the service pinpoint your exact location. (See IT at Work 7.3.) The services offer convenience because you can locate what is near you without having to consult a directory, pay phone, or map. The services offer increased productivity because you can decrease your travel time by determining points of interest in close proximity. From a business supplier’s point of view, l-commerce offers an opportunity to sell more. (See IT at Work 7.3)
The basic l-commerce services revolve around five key concepts:
1. Location. Determining the basic position of a person or a thing (e.g., bus, car, or boat) at any given time
2. Navigation. Plotting a route from one location to another
3. Tracking. Monitoring the movement of a person or a thing (e.g., a vehicle or pack- age) along the route
4. Mapping. Creating digital maps of specific geographic locations 5. Timing. Determining the precise time at a specific location
• Location-based technology.This technology consists of groups of servers that com- bine the position information with geographic- and location-specific content to pro- vide an l-commerce service. For instance, location-based technology could present a list of addresses of nearby restaurants based on the position of the caller, local street maps, and a directory of businesses. It is provided via the content center via the Internet.
• Geographic content.Geographic content consists of digitized streets, road maps, addresses, routes, landmarks, land usage, zip codes, and the like.This information must be delivered in compressed form for fast distribution over wireless networks.
• Location-specific content.Location-specific content is used in conjunction with the geographic content to provide the location of particular services. Yellow Pages direc- tories showing the location of specific businesses and services are examples of this type of content.
Figure 7.10 also shows how these technologies are used in conjunction with one another to deliver location-based services that are managed via the service center.
Underlying these technologies are global positioning and geographical information systems.
IT at Work 7.3 w
Route 91 is a major eight-lane, east-west highway near Los Angeles. Traffic is especially heavy during rush hours. California Private Transportation Company (CPT) built six express toll lanes along a 10-mile stretch in the median of the existing Highway 91.
The express lane system has only one entrance and one exit, and it is totally operated with EC technologies. The system (see Figure 7.9) works as follows.
Only prepaid subscribers can drive on the road. Subscribers receive an automatic vehicle identification (AVI) device that is placed on the rearview mirror of the car. The device, which uses RFID technology, is about the size of a thick credit card and includes a microchip, an antenna, and a battery. A large sign over the tollway tells drivers the current fee for cruising the express lanes. In a recent year it varied from $0.50 in slow traffic hours to
$3.25 during rush hours.
Sensors in the pavement let the tollway computer know that a car has entered; the car does not need to slow or stop. The AVI makes radio contact with a transceiver installed above the lane.
The transceiver relays the car’s identity through fiber-optic lines to the control center, where a computer calculates the fee for that day’s trip. The system accesses the driver’s account and the fare is automatically deducted from the driver’s prepaid account. A monthly statement is sent to the subscriber’s home.
Surveillance cameras record the license numbers of cars with- out AVIs. These cars can be stopped by police at the exit or fined by mail. Video cameras along the tollway also enable managers to keep tabs on traffic, for example, sending a tow truck to help a stranded car. Also, through knowledge of the traffic volume, pricing decisions can be made. Raising the price as traffic increases ensures that the tollway will not be jammed. In similar systems, nonsub- scribers are allowed to enter via special gates, where they pay cash.
The system saves commuters between 40 and 90 minutes each day, so it is in high demand. An interesting extension of the
The Highway 91 Project
Figure 7.9 Highway 91 Project. (Source: UPI Photo/NewsCom)
system is the use of the same AVIs for other purposes. For exam- ple, they can be used in paid parking lots. Someday you may even be recognized when you enter the drive-through lane of McDonald’s and a voice asks you, “Mr. Smart, do you want your usual meal today?”
Sources: 91expresslanes.com and en.wikipedia.org/wiki/91_Express_Lanes.
Discussion Questions: What is the role of the wireless compo- nent of this system? What are the advantages of the system to commuters? If a large percent of drivers use the express lanes, what happens?
SVR
Global Positioning System (GPS). A Global Positioning System(GPS) is a wire- less system that uses satellites to determine where the GPS device is located anywhere on earth. GPS equipment has been used extensively for navigation by commercial airlines and ships and for locating trucks and buses.
GPS is supported by 24 U.S. government satellites, plus 3 backup satellites, that are shared worldwide. Each satellite orbits the earth once every 12 hours on a pre- cise path, at an altitude of 10,900 miles.At any point in time, the exact position of each satellite is known, because the satellite broadcasts its position and a time signal from its onboard atomic clock, which is accurate to one-billionth of a second. Receivers also have accurate clocks that are synchronized with those of the satellites.
GPS handsets can be stand-alone units or can be plugged into or embedded in a mobile device. They calculate the position of the handsets or send the infor- mation to be calculated centrally. Knowing the speed of the satellite signals, 186,272 miles per second, engineers can find the location of any receiving station—its latitude and longitude—to within 50 feet by triangulation, using the distance from a GPS to threesatellites to make the computation. GPS software then computes the latitude and longitude of the receiver. This process is called geocoding.(See IT at Work 7.4.)
Geographic Information System (GIS). The location provided by GPS is expressed in terms of latitude and longitude. To make that information useful to businesses and consumers, it is necessary in many cases to relate those measures to a certain place or address. This is done by inserting the latitude and longitude onto a digital map, which is known as ageographic information system(GIS). The GIS data visualization technology integrates GPS data onto digitized map dis- plays. Companies such asmapinfo.comprovide the GIS core spatial technology, maps, and other data content needed in order to power location-based GIS/GPS services.
7.4
Location-Based Services and Commerce 207Internet
Cellular Phone Station
PDE MPC
Location Server GPS Satellites
Service Center
Content Center
Figure 7.10 Smartphone with GPS in location-based commerce.
IT at Work 7.4 w
Service Problem. Buses in certain parts of San Francisco have difficulty keeping up with the posted schedule, especially in rush hours. Generally, buses are scheduled to arrive every 20 minutes, but at times, passengers may have to wait 30 to 40 minutes. The schedules become meaningless, and passengers a
